Amazon is Going to Back the Office Every Day. But Can Cities Make a Comeback After Years of Empty Offices

This story is a part of our "Ask a Professor" series, in which Georgetown faculty break down complex issues and use their research to inform trending conversations, from the latest pop culture hits to research breakthroughs and critical global events shaping our world.

In September, Amazon mandated its employees to return to the office five days a week.

The move comes after several years of remote and hybrid work that has seen cities struggle to adapt. Empty office spaces have left once vibrant downtown areas with less foot traffic and economic activity.

Uwe Brandes is a professor of the practice and faculty director of the Urban & Regional Planning Program and founding faculty director of Georgetown's Global Cities Initiative.

"Amazon is reinforcing the importance of its headquarters' location in Seattle and signaling that its mission to embrace and foster innovation is not a spatially distributed endeavor but a socially dependent activity tied to a place," said Uwe Brandes, professor of the practice and faculty director of the Urban & Regional Planning Programand founding faculty director of Georgetown's Global Cities Initiative.

While it remains to be seen if other large firms will follow the tech giant's lead to mandate five days a week in the office, have the years of remote work already permanently changed the makeup of cities around the country? In New York, for example, 200,000 people moved awayfrom the city during the pandemic as jobs shifted online.

We asked Brandes for his take on which cities have fared the best in the new labor environment, whether converting office space to housing is the right move, and how cities might make a comeback.

Ask a Professor: Uwe Brandes on Remote Work and Urban Planning

Amazon recently announced it would require all of its employees to work in the office five days a week. Do you expect other companies to follow this trend? How might this affect large metro areas?

Most of mazon's employees are "front-line" workers who don't have a choice whether to work remotely or in person. They are among the heroes that allowed us to survive the height of the pandemic in the manner we did. Amazon's corporate staff are now being asked to come into the office, and I can imagine that fairness and organizational solidarity are associated with this decision.

I'm an urban planner, and we know that humans are social creatures. We like to be in proximity to one another. Globally, more people live together in cities than dispersed across the countryside, and the U.S. is one of the most highly urbanized countries in the world. Amazon's decision is likely due to many reasons, including organizational productivity, mentorship of new employees, and employee attraction and retention. It will be interesting to see if Amazon staff embrace this employment vision.

Are there any cities that have adapted well to the changing labor environment with the rise of remote work? What cities have not fared as well?

Broadly speaking, there are three ways of thinking about how cities are negotiating the work-from-home revolution. First, there are cities that have historically been highly dependent on public transit. These cities - mostly the older ones on the East Coast - have experienced big declines in workers willing to commute an hour or two on public transportation every day. This remains a very serious challenge in our own city of Washington, DC

Second, there are cities that intentionally chose to be car-dependent and never developed significant public transit systems in the second half of the 20th century. Throughout the public health crisis, cars have been the easiest way for us to social distance. These cities see more stable real estate markets, especially in the commercial office sector. These cities challenge the prevailing urban planning theory that mixed-use, walkable, transit-dependent cities are the most sustainable. Dallas and Houston are good examples of this.

The third category is by far the most interesting. These are cities that have aggressively pivoted their entire local economy. To be sure, these changes were being advanced before the pandemic, which only helped them change even faster. Two cities stand out: Nashville and Boise. Nashville has created an elaborate destination experience economy that leverages its identity as a place of cultural production. Boise has positioned itself as a veritable technology hub and an alternative to the larger cities on the West Coast. Lower housing costs, easy access to nature and a home-town feel have helped attract the entrepreneurial class. It is joined by the more familiar stories of Austin, Salt Lake City and Raleigh.

According to Brandes, cities like Nashville have adapted to the remote work revolution by transforming their economies to attract visitors with experiences and destination attractions.

How has the increase in remote work affected the growth of urban centers in metropolitan areas? Has remote work contributed to a greater move to the suburbs?

This is the question on many people's minds, and the changes in human behavior are still in flux and evolving. As I mentioned earlier, working remotely is a tremendous privilege. Most people don't have that choice, and those who do depend on those who don't. The National Bureau of Economic Research has suggested that up to one-third of all jobs could theoretically be completed remotely. Today, about 15% of workers work remotely. On top of this, while the U.S. is highly urbanized, twice as many people live in auto-dependent suburban locations than in urban neighborhoods.

How should cities position their central business districts in this new era? One commonly misunderstood fact is that downtowns generally host twice as many visitors on a typical day than workers. While the overall number of people in downtowns is generally down across the country, we know that this ratio has not changed in recent years because we have access to anonymous cell phone data.

One major change we see is how cities are advancing the idea of living downtown. This is not a new policy, but in recent years cities have created much more robust subsidy frameworks to convert empty office buildings into residences. Cities that have had multi-decade policy frameworks in place are really seeing an uptick in downtown residential development. Philadelphia and San Diego are great examples of this.

Has remote work made housing less affordable in cities with a lower cost of living? If so, why has housing not become more affordable in larger cities?

Rents did soften in the early stages of the pandemic, but as everyone reading this already knows, we have a housing crisis in the U.S.. Interestingly, this problem exists in many countries, so we are not alone. We have a market failure to align market supply with demand, and nationally our housing production pipeline is simply too small. In the U.S., this is primarily a local government land use and zoning issue, not one of finance.

Remote work has supported market displacement from bigger expensive cities to smaller, less expensive cities. But this has not been very meaningful in economic terms. Our own city of Washington, DC, is a really interesting example, because housing production has been at very high levels with over 35,000 new units of housing having been delivered in the last five years. And yet, the market is telling us that more people want to live in city centers than we have housing supply for.

A lot of your work focuses on sustainable urban development. Is remote work a net positive or negative for sustainability?

The definitive answer is "it depends." Despite decades of comprehensive policy, the U.S. still does not have a grip on the ever-rising emissions from the transportation sector and the associated metric of overall vehicle miles traveled. We are driving more than we ever have, despite the dramatic one-year dip in 2020. Interestingly, the majority of Americans would like to live in a walkable urban place, but we don't have enough of those kinds of places to meet demand.

From an overall energy efficiency perspective, living in a city is much more efficient than living in a dispersed location. Remote work meaningfully reduces travel demand and trip generation, so this is a positive. However, commuting trips only account for about one-third of vehicle miles traveled, so you have to think about all of the shopping trips and trips to go socialize.

The bottom line is that this is the wrong question. The focus really has to be on housing choices and the comprehensive impacts that housing has on ecological systems, agriculture and the many other urban impacts.

Office vacancies hit a record high this year. How do these vacancies affect cities in terms of their vibrancy and growth?

The commercial office crisis is a grave concern, especially to those cities that are transit-dependent. Commercial office property taxes are a mainstay revenue stream for municipal budgets. In the most challenged cities, including New York, DC, Chicago and San Francisco, we have seen property values fall by as much as 75% or even higher. This has been chilling to local economic development efforts.

Interestingly, in real estate sub-markets we see a "flight to quality," that is to say that tenants are moving to the best, newest and greenest office buildings in their city. The flip side of this trend is that some buildings, especially older buildings, are approaching what real estate professionals term "functional obsolescence." These empty buildings are prime candidates for conversion to residential uses.

This is an evolving market transformation and will play out over many years.

In cities like New York, property values have plummeted as offices have remained empty and workers have left the city with the rise of remote work.

Many cities are converting empty offices into housing. Do people moving into these converted urban spaces make up for the lost foot traffic and economic activity that offices spur?

The simple answer is no.

If you think of buildings as facilitating a density of people at that location in a city, there is no more efficient way to group people than in a commercial office building, where the allocation of space per person can be as low as 150 square feet. Residential buildings will typically be four to 10 times less "people dense" than office buildings, so there is no way the conversion of office buildings can support the same level of urban vitality that a fully occupied office building can.

But there are many other factors to consider. Imagine parts of downtowns with extensive and concentrated vacant office buildings; the Golden Triangle in Washington is such an example. It is extremely unlikely that all of those empty buildings will ever get repopulated with office workers, so it is imperative to reimagine the character - and uses - of the entire neighborhood.

Emerging data suggest that the most economically resilient neighborhoods in cities are those that have a very healthy diversification of uses, such as offices and residential uses together in similar proportions.

What are the different ways local governments can incentivize businesses to return to offices?

It has been fascinating to see the multiple iterations of the "return-to office-mandate" be ignored by employees, including by the federal government's workforce. People are voting with their feet, and the agency associated with the employer seems to have significantly eroded.

City governments need to focus on the people, not the employers. Historically, local economic development has been focused on attracting businesses, but now the businesses don't seem to have much sway with their own employees. Cities really need to think about the experience of employees and better understand what makes for an attractive value proposition for an individual to get off of the couch and come into their downtown.

If the trend of remote work persists, how can local governments encourage a dynamic urban life?

One major trend that we are spending a lot of time studying is the rise of place-based organizations such as business improvement districts and place-based civic alliances. These organizations are typically some variation of a public-private partnership, and because they are place-based, they enjoy very high levels of trust from their stakeholders. We see companies collaborating together and all sorts of creative experimentation between these organizations and governments.

These organizations orchestrate street festivals, farmers markets, ensure that litter is picked up and are at the vanguard of protecting public safety. They are typically engaged in very detailed place-based research and translate this specialized knowledge into precise marketing and recruitment strategies. They represent a major shift in urban governance, where multi-stakeholder collaboration meets data-driven management practices.

These are the organizations that are really focused on the user experience, and that is exactly what cities need right now.